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BDCs face a 25% P/NAV discount, largely due to fears of AI-driven SaaS disruption. Current data shows no systemic SaaS defaults or rising credit risk in BDC portfolios. Many of the SaaS giants have been delivering stable and strong results.

Bruni J V & Co. Co. acquired a new position in shares of Oaktree Specialty Lending Corp. (NASDAQ:OCSL – Free Report) during the second quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund acquired 2,474,804 shares of the credit services provider’s stock, valued at approximately $29,549,160,000. Oaktree Specialty Lending comprises approximately 2.7% of Bruni J V & Co. Co.’s holdings, making the stock its 16th largest holding. Bruni J V & Co. Co. owned 2.81% of Oaktree Specialty Lending at the end of the most recent quarter.

Other hedge funds and other institutional investors have also modified their holdings of the company. Avaii Wealth Management LLC acquired a new position in shares of Oaktree Specialty Lending during the 2nd quarter valued at about $615,000. Texas Capital Bank Wealth Management Services Inc acquired a new stake in Oaktree Specialty Lending during the second quarter worth about $488,000. BlackRock Inc. acquired a new stake in Oaktree Specialty Lending during the second quarter worth about $3,988,000. Plan Group Financial LLC purchased a new position in Oaktree Specialty Lending during the second quarter worth about $2,416,000. Finally, Fiduciary Financial Group LLC raised its stake in Oaktree Specialty Lending by 20.3% during the second quarter. Fiduciary Financial Group LLC now owns 185,270 shares of the credit services provider’s stock worth $2,212,000 after purchasing an additional 31,226 shares during the period. 36.79% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In Several equities analysts have weighed in on the stock. Weiss Ratings upgraded shares of Oaktree Specialty Lending from a “sell (d+)” rating to a “hold (c-)” rating in a report on Friday, August 7th. Oppenheimer set a $13.00 price target on shares of Oaktree Specialty Lending in a research report on Wednesday, May 6th. B. Riley Financial reaffirmed a “neutral” rating on shares of Oaktree Specialty Lending in a research report on Friday, August 7th. Finally, Wall Street Zen upgraded Oaktree Specialty Lending from a “sell” rating to a “hold” rating in a report on Monday. Six research analysts have rated the stock with a Hold rating, Based on data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus target price of $11.83.

Get Our Latest Research Report on OCSL Oaktree Specialty Lending Trading Up 0.7% OCSL opened at $12.94 on Wednesday. Oaktree Specialty Lending Corp. has a 52 week low of $10.63 and a 52 week high of $14.31. The business has a fifty day simple moving average of $12.07 and a 200-day simple moving average of $11.95. The firm has a market cap of $1.14 billion, a P/E ratio of 26.96 and a beta of 0.49. The company has a quick ratio of 0.19, a current ratio of 0.19 and a debt-to-equity ratio of 0.68.

Oaktree Specialty Lending (NASDAQ:OCSL – Get Free Report) last issued its quarterly earnings data on Wednesday, August 5th. The credit services provider reported $0.37 earnings per share for the quarter, beating analysts’ consensus estimates of $0.36 by $0.01. Oaktree Specialty Lending had a return on equity of 9.70% and a net margin of 14.45%.The business had revenue of $69.15 million during the quarter, compared to analysts’ expectations of $69.40 million. On average, equities analysts expect that Oaktree Specialty Lending Corp. will post 1.51 earnings per share for the current year.

Oaktree Specialty Lending Cuts Dividend The company also recently announced a quarterly dividend, which will be paid on Wednesday, September 30th. Shareholders of record on Tuesday, September 15th will be given a $0.03 dividend. This represents a $0.12 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend is Tuesday, September 15th. Oaktree Specialty Lending’s payout ratio is currently 250.00%.

(Free Report)

Oaktree Specialty Lending Corporation (NASDAQ: OCSL) is a closed-end, externally managed specialty finance company structured as a business development company (BDC). Launched in 2014, Oaktree Specialty Lending provides customized debt solutions to U.S. middle-market companies, with a focus on senior secured loans, second-lien financings, mezzanine debt and select equity co-investments. The company’s investment strategy centers on floating-rate instruments designed to offer downside protection and income potential in varying interest rate environments.

The firm’s portfolio spans a diverse array of industries, including healthcare, technology, energy, business services and consumer products.

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Oaktree Specialty Lending NASDAQ: OCSL said its non-accrual investments declined during its fiscal third quarter as the business development company exited troubled positions, while management maintained a cautious stance on private-credit deployment amid continued macroeconomic and refinancing risks.

As of June 30, non-accruals represented approximately 1.8% of the debt portfolio at fair value, down from 2.6% in the prior quarter and 3.2% a year earlier. President Matt Pendo said the company exited five non-accrual positions over the past two quarters, leaving six investments on non-accrual.

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More than 85% of the year-over-year decline in non-accrual dollars resulted from proceeds received and investments returning to accrual status, according to Pendo. The company’s net leverage was 1.02x at quarter-end, below the midpoint of its 0.9x to 1.25x target range, while available liquidity was nearly $700 million.

Thrasio repayment supports non-accrual reduction The largest portfolio development during the quarter involved Thrasio, an Amazon aggregator that had been on non-accrual since December 2023. The company sold several brands during the quarter, including stain remover Miss Mouth’s Messy Eater to Church & Dwight for a gross purchase price of $325 million.

Raghav Khanna, Oaktree Specialty Lending’s co-chief investment officer, said the asset-sale proceeds repaid all of OCSL’s first-out term loan and most of its second-out loan. In total, Thrasio repaid approximately $25 million, or more than 80% of OCSL’s loans. OCSL marked its remaining second-out position up to 99 from 80 in the prior quarter, returned the investment to accrual status and expects repayment in the coming months.

Khanna also cited progress at Avery, a condominium-project investment. Twelve units closed through June 30, compared with OCSL’s full-year budget of six units. The investment’s blended mark rose to 79 from 65 at March 31.

Income declines modestly; dividend remains at $0.33 Adjusted net investment income totaled $32.2 million, or $0.37 per share, compared with $33.7 million, or $0.38 per share, in the prior quarter. Adjusted total investment income was $69.2 million, down slightly from $69.7 million.

Chief Financial Officer and Treasurer Chris McKown attributed the decrease primarily to a smaller average portfolio balance associated with lower leverage and reduced non-recurring income. Those factors were partially offset by the return of Thrasio’s second-out loan to accrual status.

The company recorded approximately $2 million of non-recurring income during the quarter, below its trailing eight-quarter average of about $3.8 million. McKown said non-recurring income can trend lower during and after periods of heightened market volatility.

OCSL’s board declared a total cash dividend of $0.33 per share, consisting of a $0.30 base dividend and a $0.03 supplemental dividend. The dividend is scheduled to be paid Sept. 30 to shareholders of record Sept. 15.

Net asset value per share was $15.70 at June 30, compared with $15.69 at March 31. The company paid a $2.4 million Part I income-based incentive fee, or about $0.03 per share. McKown said a full incentive fee would have been about $6 million, with the lower fee reflecting the company’s total-return hurdle and the impact of losses in previous quarters.

New investments yield 10% New investment commitments totaled $206 million, roughly unchanged from $204 million in the preceding quarter. Prepayments, exits, other paydowns and sales were $263 million, compared with $334 million in the prior quarter.

The weighted-average yield on new debt investments rose to 10.0% from 9.2%, which Khanna said reflected higher spreads on new private originations. The weighted-average yield on the overall debt portfolio was 9.3% at June 30.

One new investment was Zayo Group, a fiber-infrastructure company. OCSL and other Oaktree funds funded about 60% of a private junior warehouse securitization facility supporting Zayo’s acquisition of Crown Castle’s fiber infrastructure network. The facility was priced at SOFR plus 675 basis points, according to Khanna.

First-lien senior secured debt accounted for 82% of portfolio fair value. The average debt position represented about 65 basis points of portfolio fair value, with no position exceeding 2.1%. Portfolio-company weighted-average leverage improved to 5.1x from 5.2x. Interest coverage improved to 2.4x from 2.1x. Software represented 20% of the portfolio at fair value, while high-AI-risk software exposure was about 3% of performing debt investments. Management remains defensive despite improved lending terms CEO and Co-Chief Investment Officer Armen Panossian said direct-lending terms have improved compared with 2024 and 2025 as competition has become more rational. New sponsor-backed first-lien direct loans during the June quarter were generally priced at SOFR plus 500 to 550 basis points, above 2025 levels of SOFR plus 450 to 475 basis points.

Still, Panossian said management does not believe the market is offering its maximum opportunity set. He cited slower deal flow, elevated base rates, geopolitical uncertainty, potential inflation pressure and concerns surrounding AI-related disruption in software businesses.

“We are, I would say at this point, kind of conserving our capital, maintaining ourselves in a more defensive and risk-averse posture,” Panossian said in response to an analyst question. He said OCSL wants to retain capacity to invest if greater volatility creates wider spreads, stronger terms and better returns.

Management also said it expects elevated redemption requests at some non-traded BDCs to take several quarters to normalize. Panossian said OCSL’s permanent-capital structure avoids redemption risk and could benefit if outflows reduce competition for investments or create opportunities to purchase secondary portfolios.

During the question-and-answer session, McKown acknowledged that the quarter included about $50 million of realized losses, as raised by an analyst, but said the losses related to investments marked down over several years in some cases. Pendo said the company has focused its discussions with rating agencies on reducing non-accruals, stabilizing NAV and maintaining leverage near one times.

About Oaktree Specialty Lending (NASDAQ:OCSL)Oaktree Specialty Lending Corporation NASDAQ: OCSL is a closed-end, externally managed specialty finance company structured as a business development company (BDC). Launched in 2014, Oaktree Specialty Lending provides customized debt solutions to U.S. middle-market companies, with a focus on senior secured loans, second-lien financings, mezzanine debt and select equity co-investments. The company’s investment strategy centers on floating-rate instruments designed to offer downside protection and income potential in varying interest rate environments.

The firm’s portfolio spans a diverse array of industries, including healthcare, technology, energy, business services and consumer products.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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LOS ANGELES--(BUSINESS WIRE)--Oaktree Specialty Lending Corporation (NASDAQ: OCSL) (“Oaktree Specialty Lending” or the “Company”), a specialty finance company, today announced its financial results for the third fiscal quarter ended June 30, 2026.

Financial Highlights for the Quarter Ended June 30, 2026

Total investment income was $69.4 million ($0.79 per share) for the third fiscal quarter of 2026 as compared to $70.4 million ($0.80 per share) for the second fiscal quarter of 2026. Adjusted total investment income was $69.2 million ($0.79 per share) for the third fiscal quarter of 2026 as compared with $69.7 million ($0.79 per share) for the second fiscal quarter of 2026. The decrease was primarily driven by a lower average portfolio balance and a decrease in non-recurring income. This was partially offset by restoring one investment that was previously on non-accrual status to accrual status. GAAP net investment income was $32.5 million ($0.37 per share) for the third fiscal quarter of 2026 as compared with $34.4 million ($0.39 per share) for the second fiscal quarter of 2026. The decrease for the quarter was primarily driven by lower total investment income and higher income-based ("Part I") incentive fees (net of fees waived), partially offset by lower interest expense. Adjusted net investment income was $32.2 million ($0.37 per share) for the third fiscal quarter of 2026 as compared with $33.7 million ($0.38 per share) for the second fiscal quarter of 2026. The decrease for the quarter was primarily driven by lower total investment income and higher income-based ("Part I") incentive fees (net of fees waived), partially offset by lower interest expense. Net asset value ("NAV") per share was $15.70 as of June 30, 2026, compared with $15.69 as of March 31, 2026. Originated $206.4 million of new investment commitments and received $262.8 million of proceeds from prepayments, exits, other paydowns and sales during the quarter ended June 30, 2026. The weighted average yield on new debt investments was 10.0%. Total debt outstanding was $1,451.0 million as of June 30, 2026. The total debt to equity ratio was 1.05x, and the net debt to equity ratio was 1.02x, after adjusting for cash and cash equivalents. Liquidity as of June 30, 2026 was composed of $39.9 million of unrestricted cash and cash equivalents and $659.0 million of undrawn capacity under the Company's credit facility (subject to borrowing base and other limitations). Unfunded investment commitments were $235.4 million, or $208.3 million excluding unfunded commitments to the Company's joint ventures. Quarterly and supplemental cash distributions were declared of $0.30 per share and $0.03 per share, respectively, payable in cash on September 30, 2026 to stockholders of record on September 15, 2026. “We are pleased with the progress we made in reducing our non-accrual investments,” said Armen Panossian, Chief Executive Officer and Co-Chief Investment Officer of Oaktree Specialty Lending. “Net asset value per share was stable relative to the prior quarter, and we maintained conservative leverage while continuing to selectively redeploy capital into credits that we believe offer attractive risk-adjusted returns.”

Distribution Declaration

The Board of Directors declared quarterly and supplemental cash distributions of $0.30 per share and $0.03 per share, respectively, payable in cash on September 30, 2026 to stockholders of record on September 15, 2026.

Distributions are paid primarily from distributable (taxable) income. To the extent taxable earnings for a fiscal taxable year fall below the total amount of distributions for that fiscal year, a portion of those distributions may be deemed a return of capital to the Company’s stockholders.

Results of Operations

For the three months ended

($ in thousands, except per share data)

June 30, 2026 (unaudited)

March 31, 2026 (unaudited)

June 30, 2025 (unaudited)

GAAP operating results:

Interest income

$

61,636

$

65,253

$

69,390

PIK interest income

5,209

3,455

5,070

Fee income

976

1,299

286

Dividend income

1,612

378

525

Total investment income

69,433

70,385

75,271

Net expenses

36,609

36,019

41,734

Net investment income before taxes

32,824

34,366

33,537

(Provision) benefit for taxes on net investment income

(303

)

(4

)

(56

)

Net investment income

32,521

34,362

33,481

Net realized and unrealized gains (losses), net of taxes

(1,581

)

(53,251

)

4,871

Net increase (decrease) in net assets resulting from operations

$

30,940

$

(18,889

)

$

38,352

Total investment income per common share

$

0.79

$

0.80

$

0.85

Net investment income per common share

$

0.37

$

0.39

$

0.38

Net realized and unrealized gains (losses), net of taxes per common share

$

(0.02

)

$

(0.60

)

$

0.06

Earnings (loss) per common share — basic and diluted

$

0.35

$

(0.21

)

$

0.44

Non-GAAP Financial Measures1:

Adjusted total investment income

$

69,152

$

69,744

$

74,297

Adjusted net investment income

$

32,240

$

33,721

$

32,507

Adjusted net realized and unrealized gains (losses), net of taxes

$

(2,058

)

$

(52,692

)

$

5,730

Adjusted earnings (loss)

$

30,182

$

(18,971

)

$

38,237

Adjusted total investment income per share

$

0.79

$

0.79

$

0.84

Adjusted net investment income per share

$

0.37

$

0.38

$

0.37

Adjusted net realized and unrealized gains (losses), net of taxes per share

$

(0.02

)

$

(0.60

)

$

0.07

Adjusted earnings (loss) per share

$

0.34

$

(0.22

)

$

0.43

  As of

($ in thousands, except per share data and ratios)

June 30, 2026 (unaudited)

March 31, 2026 (unaudited)

June 30, 2025 (unaudited)

Select balance sheet and other data:

Cash and cash equivalents

$

39,921

$

51,261

$

79,799

Investment portfolio at fair value

2,741,814

2,766,367

2,809,377

Total debt outstanding (net of unamortized financing costs)

1,438,842

1,481,650

1,447,551

Net assets

1,383,055

1,382,064

1,476,469

Net asset value per share

15.70

15.69

16.76

Total debt to equity ratio

1.05x

1.08x

0.99x

Net debt to equity ratio

1.02x

1.04x

0.93x

Adjusted total investment income for the quarter ended June 30, 2026 was $69.2 million and included $61.4 million of interest income from portfolio investments, $5.2 million of PIK interest income, $1.0 million of fee income and $1.6 million of dividend income. The $0.6 million quarterly decrease in adjusted total investment income was primarily driven by a lower average portfolio balance and a decrease in non-recurring income. This was partially offset by restoring one investment that was previously on non-accrual status to accrual status.

Net expenses for the quarter ended June 30, 2026 totaled $36.6 million, increased by $0.6 million from the quarter ended March 31, 2026. The increase for the quarter was primarily driven by higher Part I incentive fees (net of fees waived), partially offset by lower interest expense due to lower average borrowings outstanding during the quarter.

Adjusted net investment income was $32.2 million ($0.37 per share) for the quarter ended June 30, 2026, which was down from $33.7 million ($0.38 per share) for the quarter ended March 31, 2026. The decrease of $1.5 million primarily reflected $0.6 million of lower adjusted total investment income and $0.6 million of higher net expenses.

Adjusted net realized and unrealized losses, net of taxes, were $2.1 million for the quarter ended June 30, 2026, primarily reflecting realized and unrealized losses on certain debt and equity investments.

Portfolio and Investment Activity

As of

($ in thousands)

June 30, 2026 (unaudited)

March 31, 2026 (unaudited)

June 30, 2025 (unaudited)

Investments at fair value

$

2,741,814

$

2,766,367

$

2,809,377

Number of portfolio companies

163

163

149

Average portfolio company debt size

$

17,585

$

17,544

$

19,400

Asset class:

First lien debt

81.5

%

83.7

%

81.1

%

Second lien debt

3.0

%

1.8

%

2.3

%

Unsecured debt

5.9

%

5.2

%

4.9

%

Equity

3.9

%

3.7

%

5.5

%

JV interests

5.6

%

5.6

%

6.2

%

Non-accrual debt investments:

Non-accrual investments at fair value

$

47,035

$

69,473

$

83,637

Non-accrual investments at cost

113,573

167,301

181,660

Non-accrual investments as a percentage of debt investments at fair value

1.8

%

2.6

%

3.2

%

Non-accrual investments as a percentage of debt investments at cost

4.2

%

5.9

%

6.6

%

Number of investments on non-accrual

6

10

10

Interest rate type:

Percentage floating-rate

91.4

%

91.0

%

90.9

%

Percentage fixed-rate

8.6

%

9.0

%

9.1

%

Yields:

Weighted average yield on debt investments1

9.3

%

9.3

%

10.1

%

Cash component of weighted average yield on debt investments

8.2

%

8.4

%

9.1

%

Weighted average yield on total portfolio investments2

9.1

%

9.0

%

9.6

%

Investment activity:

New investment commitments

$

206,400

$

204,100

$

147,200

New funded investment activity3

$

235,500

$

198,600

$

143,300

Proceeds from prepayments, exits, other paydowns and sales

$

262,800

$

334,100

$

249,400

Net new investments4

$

(27,300

)

$

(135,500

)

$

(106,100

)

Number of new investment commitments in new portfolio companies

7

10

5

Number of new investment commitments in existing portfolio companies

7

5

6

Number of portfolio company exits

7

15

8

As of June 30, 2026, the fair value of the investment portfolio was $2.7 billion and was composed of investments in 163 companies. These included debt investments in 141 companies, equity investments in 39 companies, and the Company's joint venture investments in Senior Loan Fund JV I, LLC ("SLF JV I") and OCSI Glick JV LLC ("Glick JV"). 20 of the equity investments were in companies in which the Company also had a debt investment.

As of June 30, 2026, 95.0% of the Company's portfolio at fair value consisted of debt investments, including 81.5% of first lien loans, 3.0% of second lien loans and 10.5% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV. This compared to 83.7% of first lien loans, 1.8% of second lien loans and 10.8% of unsecured debt investments, including the debt investments in SLF JV I and Glick JV, as of March 31, 2026.

As of June 30, 2026, there were six investments on non-accrual status, which represented 4.2% and 1.8% of the debt portfolio at cost and fair value, respectively. As of March 31, 2026, there were ten investments on non-accrual status, which represented 5.9% and 2.6% of the debt portfolio at cost and fair value, respectively.

SLF JV I

The Company's investments in SLF JV I totaled $113.2 million at fair value as of June 30, 2026, increased by 0.4% from $112.8 million as of March 31, 2026. The increase was primarily driven by SLF JV I’s use of leverage and net unrealized appreciation in the underlying investment portfolio.

As of June 30, 2026, SLF JV I had $429.0 million in assets, including senior secured loans to 130 portfolio companies. This compared to $447.5 million in assets, including senior secured loans to 124 portfolio companies, as of March 31, 2026. SLF JV I generated cash interest income of $1.9 million for the Company during the quarter ended June 30, 2026, down from $3.0 million in the prior quarter. SLF JV I generated dividend income of $1.4 million for the Company during the quarter ended June 30, 2026, compared to no dividend income generated during the quarter ended March 31, 2026. As of June 30, 2026, SLF JV I had $17.5 million of undrawn capacity (subject to borrowing base and other limitations) on its $290 million senior revolving credit facility, and its debt to equity ratio was 2.1x.

Glick JV

The Company's investments in Glick JV totaled $41.3 million at fair value as of June 30, 2026, down 0.5% from $41.5 million as of March 31, 2026. The decrease was primarily driven by Glick JV’s use of leverage and net realized losses in the underlying investment portfolio.

As of June 30, 2026, Glick JV had $142.5 million in assets, including senior secured loans to 131 portfolio companies. This compared to $142.2 million in assets, including senior secured loans to 121 portfolio companies, as of March 31, 2026. Glick JV generated cash interest income of $1.0 million for the Company during the quarter ended June 30, 2026 down slightly from $1.2 million in the prior quarter. As of June 30, 2026, Glick JV had $30.0 million of undrawn capacity (subject to borrowing base and other limitations) on its $120 million senior revolving credit facility, and its debt to equity ratio was 1.9x.

Liquidity and Capital Resources

As of June 30, 2026, the Company had total principal value of debt outstanding of $1,451.0 million, including $501.0 million of outstanding borrowings under its revolving credit facility and $950.0 million of unsecured notes payable. The funding mix was composed of 35% secured and 65% unsecured borrowings as of June 30, 2026. The Company was in compliance with all financial covenants under its syndicated credit facility as of June 30, 2026.

As of June 30, 2026, the Company had $39.9 million of unrestricted cash and cash equivalents and $659.0 million of undrawn capacity on its credit facility (subject to borrowing base and other limitations). As of June 30, 2026, unfunded investment commitments were $235.4 million, or $208.3 million excluding unfunded commitments to the Company's joint ventures. The Company has analyzed cash and cash equivalents, availability under its credit facilities, the ability to rotate out of certain assets and amounts of unfunded commitments that could be drawn and believes its liquidity and capital resources are sufficient to invest in market opportunities as they arise.

As of June 30, 2026, the weighted average interest rate on debt outstanding, including the effect of the interest rate swap agreements was 5.9%, unchanged from the prior quarter.

The Company’s total debt to equity ratio was 1.05x and 1.08x as of June 30, 2026 and March 31, 2026, respectively. The Company's net debt to equity ratio was 1.02x and 1.04x as of June 30, 2026 and March 31, 2026, respectively.

Non-GAAP Financial Measures

On a supplemental basis, the Company is disclosing certain adjusted financial measures, each of which is calculated and presented on a basis of methodology other than in accordance with GAAP (“non-GAAP”). The Company's management uses these non-GAAP financial measures internally to analyze and evaluate financial results and performance and believes that these non-GAAP financial measures are useful to investors as an additional tool to evaluate ongoing results and trends for the Company and to review the Company’s performance without giving effect to non-cash income/gain/loss resulting from the OCSI Merger and the OSI2 Merger and in the case of adjusted net investment income, without giving effect to capital gains incentive fees. The presentation of the below non-GAAP measures is not intended to be a substitute for financial results prepared in accordance with GAAP and should not be considered in isolation.

"Adjusted Total Investment Income" and "Adjusted Total Investment Income Per Share" – represents total investment income excluding any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger. “Adjusted Net Investment Income” and “Adjusted Net Investment Income Per Share” – represents net investment income, excluding (i) any amortization or accretion of interest income resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger and (ii) capital gains incentive fees ("Part II incentive fees"). “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes” and “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per Share” – represents net realized and unrealized gains (losses) net of taxes excluding any net realized and unrealized gains (losses) resulting solely from the cost basis established by ASC 805 (see below) for the assets acquired in connection with the OCSI Merger and the OSI2 Merger. “Adjusted Earnings (Loss)” and “Adjusted Earnings (Loss) Per Share” – represents the sum of (i) Adjusted Net Investment Income and (ii) Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes and includes the impact of Part II incentive fees1, if any. The OCSI Merger and the OSI2 Merger (the "Mergers") were accounted for as asset acquisitions in accordance with the asset acquisition method of accounting as detailed in ASC 805-50, Business Combinations—Related Issues ("ASC 805"). The consideration paid to each of the stockholders of OCSI and OSI2 were allocated to the individual assets acquired and liabilities assumed based on the relative fair values of the net identifiable assets acquired other than "non-qualifying" assets, which established a new cost basis for the acquired investments under ASC 805 that, in aggregate, was different than the historical cost basis of the acquired investments prior to the OCSI Merger or the OSI2 Merger, as applicable. Additionally, immediately following the completion of the Mergers, the acquired investments were marked to their respective fair values under ASC 820, Fair Value Measurements, which resulted in unrealized appreciation/depreciation. The new cost basis established by ASC 805 on debt investments acquired will accrete/amortize over the life of each respective debt investment through interest income, with a corresponding adjustment recorded to unrealized appreciation/depreciation on such investment acquired through its ultimate disposition. The new cost basis established by ASC 805 on equity investments acquired will not accrete/amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, the Company will recognize a realized gain/loss with a corresponding reversal of the unrealized appreciation/depreciation on disposition of such equity investments acquired.

The Company’s management uses the non-GAAP financial measures described above internally to analyze and evaluate financial results and performance and to compare its financial results with those of other business development companies that have not adjusted the cost basis of certain investments pursuant to ASC 805. The Company’s management believes "Adjusted Total Investment Income", "Adjusted Total Investment Income Per Share", "Adjusted Net Investment Income" and "Adjusted Net Investment Income Per Share" are useful to investors as an additional tool to evaluate ongoing results and trends for the Company without giving effect to the income resulting from the new cost basis of the investments acquired in the Mergers because these amounts do not impact the fees payable to Oaktree Fund Advisors, LLC (the "Adviser") under its investment advisory agreement (as amended and restated from time to time, the "A&R Advisory Agreement"), and specifically as its relates to "Adjusted Net Investment Income" and "Adjusted Net Investment Income Per Share", without giving effect to Part II incentive fees. In addition, the Company’s management believes that “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes”, “Adjusted Net Realized and Unrealized Gains (Losses), Net of Taxes Per Share”, “Adjusted Earnings (Loss)” and “Adjusted Earnings (Loss) Per Share” are useful to investors as they exclude the non-cash income and gain/loss resulting from the Mergers and are used by management to evaluate the economic earnings of its investment portfolio. Moreover, these metrics more closely align the Company's key financial measures with the calculation of incentive fees payable to the Adviser under the A&R Advisory Agreement (i.e., excluding amounts resulting solely from the lower cost basis of the acquired investments established by ASC 805 that would have been to the benefit of the Adviser absent such exclusion).

The following table provides a reconciliation of total investment income (the most comparable U.S. GAAP measure) to adjusted total investment income for the periods presented:

For the three months ended

June 30, 2026
(unaudited)

March 31, 2026
(unaudited)

June 30, 2025
(unaudited)

($ in thousands, except per share data)

Amount

Per Share

Amount

Per Share

Amount

Per Share

GAAP total investment income

$

69,433

$

0.79

$

70,385

$

0.80

$

75,271

$

0.85

Interest income amortization (accretion) related to merger accounting adjustments

(281

)

—

(641

)

(0.01

)

(974

)

(0.01

)

Adjusted total investment income

$

69,152

$

0.79

$

69,744

$

0.79

$

74,297

$

0.84

The following table provides a reconciliation of net investment income (the most comparable U.S. GAAP measure) to adjusted net investment income for the periods presented:

For the three months ended

June 30, 2026
(unaudited)

March 31, 2026
(unaudited)

June 30, 2025
(unaudited)

($ in thousands, except per share data)

Amount

Per Share

Amount

Per Share

Amount

Per Share

GAAP net investment income

$

32,521

$

0.37

$

34,362

$

0.39

$

33,481

$

0.38

Interest income amortization (accretion) related to merger accounting adjustments

(281

)

—

(641

)

(0.01

)

(974

)

(0.01

)

Part II incentive fee

—

—

—

—

—

—

Adjusted net investment income

$

32,240

$

0.37

$

33,721

$

0.38

$

32,507

$

0.37

The following table provides a reconciliation of net realized and unrealized gains (losses), net of taxes (the most comparable U.S. GAAP measure) to adjusted net realized and unrealized gains (losses), net of taxes for the periods presented:

For the three months ended

June 30, 2026
(unaudited)

March 31, 2026
(unaudited)

June 30, 2025
(unaudited)

($ in thousands, except per share data)

Amount

Per Share

Amount

Per Share

Amount

Per Share

GAAP net realized and unrealized gains (losses), net of taxes

$

(1,581

)

$

(0.02

)

$

(53,251

)

$

(0.60

)

$

4,871

$

0.06

Net realized and unrealized gains (losses) related to merger accounting adjustments

(477

)

(0.01

)

559

0.01

859

0.01

Adjusted net realized and unrealized gains (losses), net of taxes

$

(2,058

)

$

(0.02

)

$

(52,692

)

$

(0.60

)

$

5,730

$

0.07

The following table provides a reconciliation of net increase (decrease) in net assets resulting from operations (the most comparable U.S. GAAP measure) to adjusted earnings (loss) for the periods presented:

For the three months ended

June 30, 2026
(unaudited)

March 31, 2026
(unaudited)

June 30, 2025
(unaudited)

($ in thousands, except per share data)

Amount

Per Share

Amount

Per Share

Amount

Per Share

Net increase (decrease) in net assets resulting from operations

$

30,940

$

0.35

$

(18,889

)

$

(0.21

)

$

38,352

$

0.44

Interest income amortization (accretion) related to merger accounting adjustments

(281

)

—

(641

)

(0.01

)

(974

)

(0.01

)

Net realized and unrealized gains (losses) related to merger accounting adjustments

(477

)

(0.01

)

559

0.01

859

0.01

Adjusted earnings (loss)

$

30,182

$

0.34

$

(18,971

)

$

(0.22

)

$

38,237

$

0.43

Conference Call Information

Oaktree Specialty Lending will host a conference call to discuss its third fiscal quarter ended June 30, 2026 results at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time on August 5, 2026. The conference call may be accessed by dialing (833) 461-5787 (U.S. callers). All callers will need to provide the meeting ID, 843 537 670, and reference “Oaktree Specialty Lending” once connected with the operator. Alternatively, a live webcast of the conference call can be accessed through the Investors section of Oaktree Specialty Lending’s website, www.oaktreespecialtylending.com. During the conference call, the Company intends to refer to an investor presentation that will be available on the Investors section of its website.

For those individuals unable to listen to the live broadcast of the conference call, a replay will be available on Oaktree Specialty Lending’s website, beginning approximately one hour after the broadcast.

About Oaktree Specialty Lending Corporation

Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is a specialty finance company dedicated to providing customized one-stop credit solutions to companies with limited access to public or syndicated capital markets. The Company's investment objective is to generate current income and capital appreciation by providing companies with flexible and innovative financing solutions, including first and second lien loans, unsecured and mezzanine loans, bonds and preferred and common equity, including equity co-investments. The Company is regulated as a business development company under the Investment Company Act of 1940, as amended, and is externally managed by Oaktree Fund Advisors, LLC, an affiliate of Oaktree Capital Management, L.P. For additional information, please visit Oaktree Specialty Lending's website at www.oaktreespecialtylending.com.

Forward-Looking Statements

Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or financial condition. The forward-looking statements may include statements as to: future operating results of the Company and distribution projections; business prospects of the Company and the prospects of its portfolio companies; and the impact of the investments that the Company expects to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) changes or potential disruptions in the Company’s operations, the economy, financial markets or political environment, including those caused by tariffs and trade disputes with other countries, inflation and an elevated interest rate environment; (ii) risks associated with possible disruption in the operations of the Company, the operations of its portfolio companies or the economy generally due to terrorism, war or other geopolitical conflict, natural disasters, pandemics or cybersecurity incidents; (iii) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in the Company’s operating areas, particularly with respect to business development companies or regulated investment companies; and (iv) other considerations that may be disclosed from time to time in the Company’s publicly disseminated documents and filings. The Company has based the forward-looking statements included in this press release on information available to it on the date of this press release, and the Company assumes no obligation to update any such forward-looking statements. The Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that it may make directly to you or through reports that the Company in the future may file with the Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

  Oaktree Specialty Lending Corporation

Consolidated Statements of Assets and Liabilities

(in thousands, except per share amounts)

  June 30, 2026
(unaudited)

March 31, 2026
(unaudited)

September 30,
2025

ASSETS

Investments at fair value:

Control investments (cost June 30, 2026: $343,242; cost March 31, 2026: $378,041; cost September 30, 2025: $377,709)

$

199,896

$

210,855

$

227,748

Affiliate investments (cost June 30, 2026: $43,826; cost March 31, 2026: $78,141; cost September 30, 2025: $58,344)

39,872

73,337

54,999

Non-control/Non-affiliate investments (cost June 30, 2026: $2,609,629; cost March 31, 2026: $2,611,720; cost September 30, 2025: $2,639,069)

2,502,046

2,482,175

2,565,035

Total investments at fair value (cost June 30, 2026: $2,996,697; cost March 31, 2026: $3,067,902; cost September 30, 2025: $3,075,122)

2,741,814

2,766,367

2,847,782

Cash and cash equivalents

39,921

51,261

79,630

Interest, dividends and fees receivable

22,965

22,886

31,868

Due from portfolio companies

237

297

3,186

Receivables from unsettled transactions

36,627

20,515

4,949

Due from broker

1,750

15,550

15,550

Deferred financing costs

8,023

8,558

9,675

Deferred offering costs

43

43

143

Derivative assets at fair value

5,815

7,859

8,713

Other assets

997

1,081

1,495

Total assets

$

2,858,192

$

2,894,417

$

3,002,991

LIABILITIES AND NET ASSETS

Liabilities:

Accounts payable, accrued expenses and other liabilities

$

2,629

$

1,852

$

1,538

Base management fee and incentive fee payable

9,419

7,107

12,515

Due to affiliate

1,957

2,113

1,569

Interest payable

10,584

10,346

12,067

Payables from unsettled transactions

4,943

3,260

15,011

Derivative liabilities at fair value

6,699

5,733

7,329

Deferred tax liability

64

292

269

Credit facilities payable

501,000

540,000

545,000

Unsecured notes payable (net of $4,954, $5,490 and $6,561 of unamortized financing costs as of June 30, 2026, March 31, 2026 and September 30, 2025 respectively)

937,842

941,650

941,880

Total liabilities

1,475,137

1,512,353

1,537,178

Commitments and contingencies

Net assets:

Common stock, $0.01 par value per share, 250,000 shares authorized; 88,086 shares issued and outstanding as of June 30, 2026, March 31, 2026 and September 30, 2025, respectively

881

881

881

Additional paid-in-capital

2,350,075

2,350,075

2,350,075

Accumulated overdistributed earnings

(967,901

)

(968,892

)

(885,143

)

Total net assets (equivalent to $15.70, $15.69 and $16.64 per common share as of June 30, 2026, March 31, 2026 and September 30, 2025, respectively)

1,383,055

1,382,064

1,465,813

Total liabilities and net assets

$

2,858,192

$

2,894,417

$

3,002,991

  Oaktree Specialty Lending Corporation

Consolidated Statements of Operations

(in thousands, except per share amounts)

  Three months ended
June 30, 2026
(unaudited)

Three months ended
March 31, 2026
(unaudited)

Three months ended
June 30, 2025
(unaudited)

Nine months ended
June 30, 2026
(unaudited)

Nine months ended
June 30, 2025
(unaudited)

Interest income:

Control investments

$

3,271

$

4,794

$

5,165

$

12,963

$

15,275

Affiliate investments

1,475

848

277

2,863

602

Non-control/Non-affiliate investments

56,032

58,566

62,441

175,155

198,165

Interest on cash and cash equivalents

858

1,045

1,507

2,831

4,293

Total interest income

61,636

65,253

69,390

193,812

218,335

PIK interest income:

Control investments

—

—

—

—

830

Affiliate investments

217

281

28

945

83

Non-control/Non-affiliate investments

4,992

3,174

5,042

11,567

14,416

Total PIK interest income

5,209

3,455

5,070

12,512

15,329

Fee income:

Affiliate investments

—

—

—

4

—

Non-control/Non-affiliate investments

976

1,299

286

5,243

3,707

Total fee income

976

1,299

286

5,247

3,707

Dividend income:

Control investments

1,400

—

525

1,925

1,925

Non-control/Non-affiliate investments

27

23

—

50

190

Non-control/Non-affiliate investments - PIK

185

355

—

1,368

—

Total dividend income

1,612

378

525

3,343

2,115

Total investment income

69,433

70,385

75,271

214,914

239,486

Expenses:

Base management fee

7,046

7,107

7,195

21,697

22,854

Part I incentive fee

2,373

—

5,767

3,561

20,413

Professional fees

1,627

1,288

1,388

4,329

3,682

Directors fees

160

160

160

480

480

Interest expense

24,139

25,626

31,061

76,424

89,814

Administrator expense

623

663

525

1,856

1,350

General and administrative expenses

641

1,175

997

2,657

2,860

Total expenses

36,609

36,019

47,093

111,004

141,453

Management fees waived

—

—

—

—

(933

)

Part I incentive fees waived

—

—

(5,359

)

—

(18,469

)

Net expenses

36,609

36,019

41,734

111,004

122,051

Net investment income before taxes

32,824

34,366

33,537

103,910

117,435

(Provision) benefit for taxes on net investment income

(303

)

(4

)

(56

)

(324

)

(597

)

Net investment income

32,521

34,362

33,481

103,586

116,838

Unrealized appreciation (depreciation):

Control investments

23,840

(8,265

)

(2,024

)

6,615

(62,940

)

Affiliate investments

850

(663

)

(246

)

1,145

(568

)

Non-control/Non-affiliate investments

21,987

(32,736

)

18,905

(35,283

)

(17,268

)

Foreign currency forward contracts

1,533

2,326

1,937

3,977

(2,289

)

Net unrealized appreciation (depreciation)

48,210

(39,338

)

18,572

(23,546

)

(83,065

)

Realized gains (losses):

Control investments

(24,337

)

—

—

(24,337

)

13

Affiliate investments

4,849

169

145

5,070

190

Non-control/Non-affiliate investments

(30,544

)

(17,393

)

1,705

(47,861

)

(16,898

)

Foreign currency forward contracts

493

3,614

(15,282

)

5,321

(7,342

)

Net realized gains (losses)

(49,539

)

(13,610

)

(13,432

)

(61,807

)

(24,037

)

(Provision) benefit for taxes on realized and unrealized gains (losses)

(252

)

(303

)

(269

)

(574

)

(394

)

Net realized and unrealized gains (losses), net of taxes

(1,581

)

(53,251

)

4,871

(85,927

)

(107,496

)

Net increase (decrease) in net assets resulting from operations

$

30,940

$

(18,889

)

$

38,352

$

17,659

$

9,342

Net investment income per common share — basic and diluted

$

0.37

$

0.39

$

0.38

$

1.18

$

1.37

Earnings (loss) per common share — basic and diluted

$

0.35

$

(0.21

)

$

0.44

$

0.20

$

0.11

Weighted average common shares outstanding — basic and diluted

88,086

88,086

88,086

88,086

85,402

Oaktree Specialty Lending trades at its steepest discount to NAV, now 32.88%, offering potential upside if the gap narrows. OCSL maintains a 14.63% dividend yield with a $0.40 per share quarterly payout, but dividend coverage is tight at 105%, leaving little margin for slippage. Portfolio diversification is healthy, with a 23% exposure to software & services, which the market sees as a risk from possible AI-driven disruption.

Retirement income portfolios should prioritize meaningful dividend yields to avoid principal drawdown. Predictable and frequent cash flows, ideally monthly, are essential for reliable retirement income. Stress-free investments are key to minimizing worry during adverse economic conditions and avoiding income cuts.

I have gathered 20 BDC short interest statistics. What I found out surprised me - i.e., my top (quality) BDC picks are among the most shorted ones. In the article I've unpacked this situation and explained the potential drivers from the short sellers' perspective.

Posted by Defense World Staff on Apr 15th, 2026

Shares of Oaktree Specialty Lending Corp. (NASDAQ:OCSL – Get Free Report) have earned a consensus recommendation of “Reduce” from the six analysts that are covering the company, MarketBeat reports. One equities research analyst has rated the stock with a sell recommendation and five have issued a hold recommendation on the company. The average 1-year price target among brokers that have covered the stock in the last year is $12.1667.

Several brokerages have recently weighed in on OCSL. Weiss Ratings lowered Oaktree Specialty Lending from a “hold (c-)” rating to a “sell (d+)” rating in a report on Monday, February 9th. Zacks Research raised Oaktree Specialty Lending from a “strong sell” rating to a “hold” rating in a research note on Monday, April 6th. Wells Fargo & Company decreased their price target on Oaktree Specialty Lending from $13.00 to $12.00 and set an “equal weight” rating on the stock in a research note on Thursday, February 5th. Wall Street Zen raised Oaktree Specialty Lending from a “sell” rating to a “hold” rating in a research note on Saturday. Finally, JPMorgan Chase & Co. decreased their price target on Oaktree Specialty Lending from $13.50 to $10.50 and set a “neutral” rating on the stock in a research note on Friday, March 13th.

Read Our Latest Stock Report on Oaktree Specialty Lending

Oaktree Specialty Lending Price Performance Shares of NASDAQ:OCSL opened at $12.41 on Wednesday. Oaktree Specialty Lending has a 1-year low of $10.63 and a 1-year high of $14.90. The firm has a market capitalization of $1.09 billion, a PE ratio of 34.47 and a beta of 0.49. The business’s 50 day moving average is $11.62 and its 200-day moving average is $12.63. The company has a current ratio of 0.16, a quick ratio of 0.16 and a debt-to-equity ratio of 0.66.

Oaktree Specialty Lending (NASDAQ:OCSL – Get Free Report) last announced its quarterly earnings data on Tuesday, February 3rd. The credit services provider reported $0.41 earnings per share for the quarter, topping the consensus estimate of $0.38 by $0.03. Oaktree Specialty Lending had a return on equity of 9.75% and a net margin of 10.58%.The company had revenue of $74.48 million for the quarter, compared to analyst estimates of $75.72 million. During the same quarter last year, the firm earned $0.54 EPS. Sell-side analysts predict that Oaktree Specialty Lending will post 2.06 earnings per share for the current year.

Oaktree Specialty Lending Dividend Announcement The business also recently declared a quarterly dividend, which was paid on Tuesday, March 31st. Investors of record on Monday, March 16th were paid a $0.40 dividend. The ex-dividend date of this dividend was Monday, March 16th. This represents a $1.60 annualized dividend and a yield of 12.9%. Oaktree Specialty Lending’s payout ratio is currently 444.44%.

Insider Buying and Selling In related news, Director Phyllis R. Caldwell purchased 2,500 shares of the firm’s stock in a transaction that occurred on Monday, March 16th. The shares were acquired at an average price of $10.77 per share, with a total value of $26,925.00. Following the purchase, the director directly owned 23,500 shares in the company, valued at $253,095. This represents a 11.90% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available through the SEC website. 0.29% of the stock is currently owned by corporate insiders.

Institutional Trading of Oaktree Specialty Lending Institutional investors have recently bought and sold shares of the stock. Garner Asset Management Corp acquired a new stake in Oaktree Specialty Lending in the 4th quarter valued at $38,000. Northwestern Mutual Wealth Management Co. acquired a new position in Oaktree Specialty Lending in the fourth quarter worth $42,000. Sound Income Strategies LLC acquired a new position in Oaktree Specialty Lending in the third quarter worth $42,000. State of Alaska Department of Revenue acquired a new position in Oaktree Specialty Lending in the third quarter worth $51,000. Finally, Tower Research Capital LLC TRC boosted its stake in Oaktree Specialty Lending by 1,025.1% in the second quarter. Tower Research Capital LLC TRC now owns 4,163 shares of the credit services provider’s stock worth $57,000 after purchasing an additional 3,793 shares in the last quarter. Institutional investors and hedge funds own 36.79% of the company’s stock.

Oaktree Specialty Lending Company Profile (Get Free Report)

Oaktree Specialty Lending Corporation (NASDAQ: OCSL) is a closed-end, externally managed specialty finance company structured as a business development company (BDC). Launched in 2014, Oaktree Specialty Lending provides customized debt solutions to U.S. middle-market companies, with a focus on senior secured loans, second-lien financings, mezzanine debt and select equity co-investments. The company’s investment strategy centers on floating-rate instruments designed to offer downside protection and income potential in varying interest rate environments.

The firm’s portfolio spans a diverse array of industries, including healthcare, technology, energy, business services and consumer products.

Further Reading Five stocks we like better than Oaktree Specialty Lending

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LOS ANGELES--(BUSINESS WIRE)--Oaktree Specialty Lending Corporation (NASDAQ:OCSL) (“Oaktree Specialty Lending” or the “Company”), a specialty finance company, today announced its financial results for the second fiscal quarter ended March 31, 2026. Financial Highlights for the Quarter Ended March 31, 2026 Total investment income was $70.4 million ($0.80 per share) for the second fiscal quarter of 2026 as compared to $75.1 million ($0.85 per share) for the first fiscal quarter of 2026. Adjusted.

Oaktree Specialty Lending Corporation (OCSL) Q2 2026 Earnings Call Transcript

Panoramic Investment Advisors disclosed on May 6, 2026, a new position in Oaktree Specialty Lending (OCSL +0.25%), acquiring 1,241,204 shares in an estimated $14.86 million trade based on average first-quarter 2026 pricing.

Oaktree Specialty Lending provides tailored credit and capital solutions to middle-market companies across North America.

What happenedAccording to a Securities and Exchange Commission (SEC) filing dated May 6, 2026, Panoramic Investment Advisors initiated a new position in Oaktree Specialty Lending by purchasing 1,241,204 shares. The estimated transaction value is $14.86 million, based on the mean unadjusted closing price during the first quarter of 2026. At quarter’s end, the position was valued at $14.03 million, reflecting price movement during the period.

What else to knowThis was a new position for the fund, representing 6.79% of 13F reportable assets as of March 31, 2026.

Top five holdings after the filing:

NYSEMKT:JEPI: $22.85 million (11.1% of AUM)NASDAQ:TRIN: $19.09 million (9.2% of AUM)NYSEMKT:PFFA: $15.77 million (7.6% of AUM)NASDAQ:GAIN: $15.19 million (7.4% of AUM)NASDAQ:ARCC: $14.70 million (7.1% of AUM)As of May 6, 2026, shares of Oaktree Specialty Lending were priced at $12.51, up 5.7% over the prior year, underperforming the S&P 500 by 25.7 percentage points.

Company overviewMetricValuePrice (as of market close May 6, 2026)$12.51Market capitalization$1.10 billionRevenue (TTM)$279.31 millionNet income (TTM)$49.65 millionCompany snapshotProvides debt and equity financing solutions to middle-market companies, including first and second lien loans, mezzanine debt, and preferred equityOperates as a business development company, generating income primarily from interest and fee income on its investment portfolioTargets small and mid-sized businesses in North America, focusing on sectors such as healthcare, business services, manufacturing, and consumer industriesOaktree Specialty Lending Corporation is a business development company focused on providing customized credit and capital solutions to middle-market companies. By leveraging its expertise in structuring a range of debt and equity investments, the company aims to deliver attractive risk-adjusted returns while supporting portfolio company growth.

What this transaction means for investorsPanoramic Investment Advisors, a Colorado-based investment advisory firm, recently disclosed the purchase of approximately 1.2 million shares of Oaktree Specialty Lending stock, valued at about $14.9 million during the first quarter (the three months ending on March 31, 2026). Here are some key takeaways for investors.

To begin, Oaktree is a financial stock. Specifically, it is a specialized lender that offers loans to mid-sized businesses in the healthcare, manufacturing, and consumer sectors. The company aims to return significant value to shareholders through its large dividend, which currently yields about 9.8%.

As for performance, Oaktree stock hasn’t excelled in recent years. Since mid 2023, Oaktree shares have delivered a total return of less than 1%, equating to a compound annual growth rate (CAGR) of 0.3%. The S&P 500, meanwhile, has delivered a total return of 85% over the same period, with a CAGR of 22.7%.

Oaktree has struggled to deliver a growing revenue base. Trailing 12-month revenue now stands at $279 million, down from a three-year high of $360 million in early 2024.

In summary, Oaktree stock may appeal to income-oriented investors thanks to its large dividend yield. However, the quality of its underlying loan portfolio will remain a question mark for some investors.

More than 1,500 stocks have reported earnings since the current season began in mid-April, and the average stock that has reported has seen an average absolute one-day share price reaction of roughly 7%. The last time we saw earnings vol spike was during the Financial Crisis bear market, when stocks were tanking. This time around, we're seeing earnings vol increase during a strong AI-driven bull market. Tech stocks are seeing record earnings day volatility as investors and traders presumably make snap judgements about AI's future impact on the bottom line.

There is a principle I have followed for 30 years in this business. When the smartest credit team on the planet starts aggressively buying a beaten-down asset class they understand better than anyone alive, you do not sit on your hands and debate whether the timing is perfect.

You take notes, you do your homework, and you act.

Here’s exactly what they bought, what they sold, and why.

Ares spent the first quarter buying Business Development Companies like the market was having a clearance sale, which frankly it was. 

The biggest move by percentage was Morgan Stanley Direct Lending (NYSE:MSDL), where they added 312% to the position, nearly quadrupling their stake at an average price of $16.19, a name now trading at $15.09. 

Next came Hercules Capital (NYSE:HTGC), where they added 285%, bringing the position to 776,606 shares at an average cost of $17.09 against a current price of $15.34. That is a 10% discount to where they were buying. 

MSC Income Fund (NYSE:MSIF) was added to by 40% at an average of $15.05, now at $11.80.

FS KKR Capital (NYSE:FSK) saw an 18.8% addition. 

Blue Owl Technology Finance (NYSE:OTF) got an 18% addition.

Ares Capital Corporation (NASDAQ:ARCC) itself got a 16% addition at an average of $19.24. 

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Count them up. 

That is 17 separate BDC or direct lending positions where Ares either added meaningfully or initiated outright in Q1 2026. Every single one of them is trading below where Ares was buying. 

The sector has gotten cheaper since the quarter ended, which means the opportunity has only improved. When the firm that built this industry buys this broadly and this aggressively across the sector, they are not guessing. 

They are expressing a conviction.

This is the Drexel-Apollo-Ares lineage doing exactly what it has always done best, finding a debt instrument it understands and sizing into it at a level that reflects real conviction. Integer is a medical device component manufacturer with a solid underlying business. 

Ares looked at the capital structure and liked what they saw.

Both are BDCs. Both have gotten cheaper since Ares bought them. Both are now considerably more interesting.

When a firm with $407 billion in credit assets under management looks at a BDC and decides to sell every single share, that is information worth having. I would not be running to buy NMFC on the dip.

This is a special situation rather than a market call, and Ares is not going anywhere on it. They have owned it since Q2 2023 and this is a controlled company situation that will play out on its own timeline. 

Among the other existing positions, Global Business Travel Group (NYSE:GBTG) is the standout performer, up 23% year to date and 61% month to date. 

ARKO Corp. (NASDAQ:ARKO) is up nearly 70% year to date. 

The absence of additions in those names tells you something about the conviction level behind each one.

Ares Management is one of the most disciplined credit organizations ever assembled. They built their reputation by being right about credit quality over long periods of time through multiple cycles. 

Their Q1 2026 activity is sending a clear message. 

They believe BDC valuations have overshot to the downside. They believe the direct lending asset class, the one they built, remains fundamentally sound despite the pressure on book values and net asset values that the sector has seen. 

And they are backing that belief with real capital across a broad enough set of names to make clear this is a thesis, not a coincidence.

Several of the names they were buying in Q1 are now trading even cheaper than where they bought them. GSBD is at $8.86 against their $10.58 average. FSK is at $10.78 against their $18.98 average. OTF is at $10.63 against their $14.40 average. RWAY is at $6.32 against their $9.91 average. 

The portfolio has moved against them since quarter end, which in the language of deep value investing means the setup has improved, not deteriorated.

My framework has always been the same. Find an asset class with real fundamental value being temporarily repriced by sentiment rather than credit reality. 

Confirm that the smartest operators in the space are buying rather than running. 

Make sure the yield compensates you adequately while you wait for the market to come to its senses. 

All three boxes are checked here. The next step is up to you.

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Oaktree Specialty Lending is rated HOLD due to persistent NAV erosion despite a historically deep P/NAV discount. OCSL's NAV has declined 18% over six quarters, driven by software markdowns and non-accruals, not operating losses. Income coverage remains adequate, with an 11.5% yield and a more durable dividend structure tied to earnings.